The US SEC has denied Binance’s motion to dismiss the litigation, citing significant misunderstandings of securities law.
In a recent filing, the Securities and Exchange Commission (SEC) reaffirmed that Binance’s dismissal petition lacks legal merit. The aforementioned submission on Wednesday was made in reply to the earlier endeavor by the cryptocurrency exchange to dismiss the SEC lawsuit.
SEC Mentions Legal Error in The Plea
In opposition to Binance’s motion to dismiss, the SEC argues that the exchange’s defense is based on erroneous legal interpretations.
The SEC asserts that the exchange’s argument would compromise established precedents crucial to the operation of securities laws in the United States. They contend that the framework proposed by Binance needs to be more flexible and familiar with the current legal system.
The SEC accuses Binance of violating securities law by introducing the BNB token and Binance USD (BUSD), as evidenced by its allegations.
In addition, the SEC asserts that the corporation’s staking and earning programs constitute securities law violations. Furthermore, the SEC challenges Binance’s reliance on the “Major Questions Doctrine,” a legal defense principle that crypto firms are progressively employing.
Binance Conflicts SEC Regarding Legal Reach
Changpeng Zhao, the founder of Binance and its U.S. subsidiary, has contended that the SEC’s lawsuit exceeds the scope of its regulatory authority. In their opinion, the agency is required to illustrate how its activities infringe upon securities laws sufficiently.
Nonetheless, this notion has been categorically rejected by the SEC, which remains committed to upholding the legal frameworks established by Congress.
This legal dispute arose after the SEC’s ongoing investigation regarding the cryptocurrency sector. The defense of the exchange contests how the SEC construed their activities as infractions, whereas the SEC maintains its position that conventional securities law should be applied to the cryptocurrency industry.
